by Matt Kibbe
With the completion of the Keynesian revolution, these time-tested principles of fiscal responsibility were consigned to the heap of superstitious nostrums that once stifled enlightened political-fiscal activism. Keynesianism stood the Smithian analogy on its head. The stress was placed on the differences rather than the similarities between a family and the state, and notably with respect to principles of prudent fiscal conduct. The state was no longer to be conceived in the image of the family, and the rules of prudent fiscal conduct differed dramatically as between the two institutions. The message of Keynesianism might be summarized as: What is folly in the conduct of a private family may be prudence in the conduct of the affairs of a great nation.1
So Keynes provided a pretense of intellectual legitimacy to the natural, and very destructive, instincts of politicians wanting to spend more money than public coffers held. “In the long run we are all dead,”2 was how Keynes himself rationalized the idea of spending binges that were unsustainable. Such shortsighted thinking fits perfectly into the psyche of politicians thinking in two-year increments, or presidents thinking about a single reelection bid after four years in office.
Keynes is, in fact, dead, but if you are eighteen years old today, you are on the hook for his bad economics. The irresponsible choices being made today will have to be paid for in the future, by our children and grandchildren. You can only pass the buck so far. As of this writing, every man, woman, and child in America owes more than fifty thousand dollars toward the national debt, a number that grows larger with every passing day.3 With a declining birth rate and a generation of baby boomers starting to enter retirement, Social Security has become neither social nor secure. It is a massive, cross-generational wealth transfer, with millennials losing a huge chunk of their paycheck to pay into a system that they know is unlikely to exist when they seek to retire in forty years. The finances for Medicare are far worse, and you can only expect the financial burden on young people to grow as ObamaCare raids Medicare coffers.
It all seems crazy, and young people are rightfully cynical about their futures.
On top of all of this, President Obama’s controversial health-care scheme imposes its “individual mandate,” Washington-speak for an incredibly regressive “tax” imposed on young, healthy people that forces them to buy mandated health insurance plans that they can’t afford and don’t need, or else pay a fine. With all of the new federal add-ons, insurance company lobbyists insisted on a coercive means of making young people cross-subsidize the benefits of older, wealthier patients. Imagine being able to force new customers to overpay for your product. What a deal.
And why not? If you were the CEO of McDonald’s and the White House offered you a chance to mandate the consumption of Big Macs for lunch, would you take the deal, strings attached? For a number of health-care and big business interests lobbying their parochial agenda in the battle over ObamaCare in 2009, the answer, apparently, has been a hearty “Yes, We Can.”
And so it was that ObamaCare would include a mandate, with the full coercive force of the federal government and the IRS behind it, that eighteen-year-olds buy health insurance from a politically prescribed set of plans approved by the federal government. Insurance providers just love it when healthy young people sign up for gold-plated insurance plans. It’s because young people seldom use the health-care system.
Which is why so many young people choose to go uninsured in today’s screwed-up health-care marketplace. It’s a question of costs versus benefits on a really tight budget.
Why would progressives flack for such an affront to the cause of social justice? Why would they ever support a political shakedown that fattens the bottom lines of the federal government and insurance kingpins alike? It just doesn’t make any sense.
No sense at all, until you understand that the individual mandate is the heart of the ObamaCare redistribution scheme. Without overcharging young people, the ObamaCare exchanges simply won’t work.
And this is what the new left, Democrats, and progressives are foisting onto already overburdened youth. When did the American left decide that it was cool to subsidize the Man on the backs of millennials struggling with unprecedented student loan debt and a jobless recession that never ends? Just think about the real burdens foisted upon American youth by the failed experiments in big government.
IT SUCKS TO BE YOUNG
The most important event in anyone’s personal launch into orbit is finding a good job. If you are graduating from high school or college in 2014, this is no simple task. A market crash in 2008 enabled by easy money, easy credit, easy spending, and an expanding federal bureaucratic expanse was met with more of the same, effectively creating economic refugees of the millennial generation. The hits keep coming, and the affront of an individual mandate adds to the weight of twenty-somethings already pig-piled by the secondary effects of a big, intrusive, government agenda paid for with borrowed money.
The so-called recovery from the Great Recession has been especially hard on the young. Rates of new job creation have not returned to precrash levels, or even acceptable average rates. Deceptive decreases in the unemployment rate have been driven by ever lower levels of participation in the labor force. By September 2013 this rate had plummeted to its lowest level in thirty-five years.4
In other words, more people are giving up.
Unemployment has remained a serious problem for everyone, but those between the ages of twenty and twenty-four have been hit the hardest. The lack of workplace experience among recent graduates means that they have the least leverage with which to negotiate with employers, and when jobs have to be cut, theirs are the first to go. As of August 2013 the unemployment rate among Americans aged twenty to twenty-four was a dismal 13 percent,5 and a Pew Research Study found that a record number—36 percent—of millennials are forced to live under their parents’ roofs.6
Adding insult to injury is the insane cost of higher education. More and more young people graduate with a degree that is effectively worth less than the debt they accrued to finance it. The total amount of student loan debt has ballooned in recent years, now reaching an astonishing $1 trillion, an average of more than $24,000 per student.7 A third of this debt has been incurred to support advanced degrees, more paper pursued by more students as a means to delay entering the uninviting job market.8 Student loan debt tripled between 2004 and 2012 and was the only kind of household debt that continued rising throughout the Great Recession. In 2012, nearly one-third of student loan borrowers were delinquent in their loan repayments.9
Why are students accruing so much debt? Because the costs of higher education, fed by bureaucracy and government subsidies, have skyrocketed to the point where few students are able to afford them. Here again, notice the bitter irony of federal intervention and borrowed dollars: The result is even less affordable education. From 2012 to 2013, the net cost of one year at a public, in-state university averaged more than $12,000.10 And that’s not counting the opportunity cost of missing out on four years of real-world work experience.
This situation is clearly unsustainable. Like all financial bubbles, this one must inevitably burst, bringing with it still more economic chaos. The Federal Advisory Council has warned that the rapid growth in student loan debt looks eerily similar to the housing bubble that precipitated the Great Recession.11 As the Obama administration continues to push the idea that everyone should go to college, with financial help from new federal subsidies, the resulting increase in costs and debt issuance could well lead to another crash as students are forced to default.
Students cannot afford the escalating costs of college and graduate school, and the debt they are racking up today will dog them throughout their adult lives. The cushy, cloistered lives of college professors look not unlike those of career federal bureaucrats. The permanent administrative class in our public university system is bleeding young people dry, all for an overpriced education that will not pay for itself, even if you can find a job.
It sucks to be young today. You have inherited all of the financial burdens accrued by older generations and bad fiscal management in Washington, D.C., but you see few of the opportunities once virtually guaranteed by the American dream.
Millennial voters, of course, swung big for Obama in both 2008 and 2012.12 In 2008, 18- to 29-year-olds broke for Obama 66 percent, to 32 percent for his challenger, John McCain. In 2012, 60 percent of voting young people supported the president’s reelection, compared to 37 percent for Mitt Romney. Their aversion to the crusty candidates the Republican Party has offered up makes some sense, I suppose. The research surrounding recent presidential and midterm primaries and caucuses suggests that support for the Republican brand is nearing a historic low. What is the reason for this?
Here’s the popular hypothesis: Nationally, America is experiencing growing racial and ethnic diversity, which is concentrated among younger voters. This benefits Democrats. Race, ethnicity, and age are strongly associated with one’s opinions about government. It’s a safe bet that these factors account for greater degrees of liberalism within the younger age groups.
Much-hyped autopsies confirm the obvious. The “Grand Old Party” stresses neither “Grandness” nor the idea of “Party.” They underscore the “Old.” Consensus is, they’re outmoded, out-of-touch, aging white guys. This won’t come as breaking news, but Democrats are perceived as more tolerant.
Now things get more complicated.
A 2013 poll conducted by the polling company for FreedomWorks found that attitudes among young people are shifting toward a preference for smaller government.13
We asked young voters to weigh whether “you would favor a smaller government with few services but lower taxes, or a larger government which provides more services but has higher taxes?” Asked in this reflection-of-reality way, Millennials’ views on the role of government flip. A majority of young voters favor “smaller government with fewer services but lower taxes.” College-age and recent graduates (ages 18–24) favor smaller government by 51 to 45 percent. Young voters ages 25–32, who have been on the job market for a few years and are more likely to be paying taxes, favor smaller government by 64 to 24 percent.
These numbers signal a reversal of the trend observed in a 2010 study by the Pew Research Center, which found that 53 percent of millennials agree with the statement “government should do more.”14
Why is this the case? Well, the Pew report suggests ethnic and racial diversity does play a part. However, these youngsters are also less religious, less likely to have served in the military, and will probably emerge as the most educated generation in American history. That’s partly because we’ve matured to meet the “the demands of a knowledge-based economy,” but it also has something to do with the fact that young people grasp at degrees because they can’t find jobs.
While they remain largely optimistic, their emergence into adulthood has been stunted. In the wake of the Great Recession, careers are hard to come by, and young people’s first jobs are often low-paid and unappealing. While they remain more upbeat about their own economic futures, and the overall health of our nation, that optimism has been tempered.
INSANELY AUTHORITARIAN
And then if you do find a job, even in this economy, the IRS comes knocking on your door to make sure you “voluntarily” comply with the ObamaCare revolution. They will make you an offer you can’t possibly refuse.
The payoff for youth’s heightened political allegiance to the Hope and Change Agenda is a coerced payout to cross-subsidize the government health insurance plans of those who are older and wealthier. The whole ObamaCare scheme would collapse unless carried forward on the backs of the young, and the successful implementation of an “individual mandate” that forces them to buy expensive health plans.
What would Jerry Rubin, the Yippie war protestor, do? He would torch his ObamaCare card without a moment’s hesitation, chanting, “Hell no, we won’t go.”
This is an opportunity. Or, as the president would say, “a teachable moment.” It seems like a unique time for peaceful civil disobedience and noncompliance—a grassroots rejection of Washington’s corrupt ways, where insiders win at the expense of the rest of America. I thought it would be cool to skewer progressives for their hypocrisy on the individual mandate by tapping into a bit of 1960s hippie zeitgeist. I am after all, a seasoned Deadhead with nearly one hundred live Grateful Dead shows under my belt. So my colleagues at FreedomWorks got together with two of the best liberty-minded student groups—Students For Liberty and Young Americans For Liberty—and organized a series of “Burn Your ObamaCare Card” protests channeling the ethos of antiwar protestors. At least David A. Graham at The Atlantic gets the joke:
This is an ingenious cultural appropriation. On the one hand, FreedomWorks is drawing a pointed link between protests against the Vietnam-era draft—a hated government program that depended on forcing the country’s young to sign up for something not in their best interests—and the Affordable Care Act, a hated government program that depends on forcing the country’s young to sign up for something that’s (arguably) not in their best interests. There are, to be sure, some pretty serious differences. . . . But there’s a smirk behind it all too. FreedomWorks is taking a treasured image of the anti-war left, the high-water mark of American progressive political action, and seeking to make it the right’s own.15
I would have thought that the individual mandate would have united civil and economic libertarians—left, right, center, and anyone with a sense of fairness—against the insider trading of the political class in Washington, D.C. Instead, the progressive standard-bearers at Mother Jones went all apoplectic at the very notion of dodging the ObamaCare draft. “So not only [is FreedomWorks] going to be encouraging people to break the law,” froths Mother Jones, “they’re literally going to be encouraging people not to buy health insurance. . . . It’s times like this that words fail those of us with a few remaining vestiges of human decency.”16
REALLY? THE VERY FEW last remaining vestiges of human dignity? What exactly is undignified about young people making rational economic choices regardless of what their Washington, D.C., overlords might deem best for them? Maybe young people are fed up with being bled dry, unable to save, to build their own dream, and wanting to be free from someone else’s grand plan.
I read panic in Mother Jones’s unhinged rant—a realization that the American left is now the Man, forcing its authoritarian plans on an unwilling generation at the point of a gun. How ironic.
Secretary of Health and Human Services Kathleen Sebelius called FreedomWorks’ ceremonial card-burning efforts “dismal.”17 Her comment came before the actual rollout of Healthcare.gov, an embarrassing failure which truly defined the term. HHS is so worried about its ability to conscript enough young, able bodies into the master plan that it rolled out a $700 million corporate PR campaign to convince twenty-somethings to buy an overpriced Edsel.18
The problem with the Obama administration’s costly propaganda, to paraphrase Bill Clinton’s memorable line from the 2012 Democratic National Convention, is simple “arithmetic.” Hypotheticals and political talking points have been replaced with actual price tags based on actual options. And the numbers are indeed “dismal.”
According to one front-page Wall Street Journal article, “The success of the new health-care law rides in large measure on whether young, healthy people . . . decide to give up a chunk of disposable income to pay for insurance.”19
Jonathan Scarboro, when asked, did the math. “I’m not going to pay for that,” he says of mandated coverage. At thirty years old, Scarboro makes $29,000 a year and is now required to pay, at minimum, $147 a month, with a $6,350 deductible. “It breaks down to: Can I afford it? And, am I getting my money’s worth?”
All good questions, Jonathan, and the answer is “no.” Better to opt out of the program, burn your “ObamaCare card,” and pay the fine. That’s the conclusion of eight out of ten young people interviewed by the Journal.
Turns out, this strategy could save young Americans hundreds of dollars a year. A National Center for Public Policy Research study recently revealed that single, childless Americans between the ages of eighteen and thirty-four could save at least $500 by opting out of ObamaCare and paying the $95 individual mandate penalty instead.20
The Obama administration made its case for the Affordable Care Act by insisting that the law would reduce health-care costs and premiums, but this claim turns out to be just as true as the president’s memorable promise that you could keep your current plan, period. Particularly for young people, the very purpose of the Affordable Care Act is to increase costs and coverage. When the final prices for the plans being offered on health-care exchanges were announced, the news was far from reassuring for a generation struggling to keep their heads above water as it is. While prices vary considerably by state, the national average cost to a young, healthy person turned out to be $163 a month.21 That’s for the lowest-quality “bronze” plan they are permitted to buy. The kind of coverage young people actually might need, insurance against catastrophic injuries, was not an option. After all, a plan like that would not have the redistributive effect so desired by the architects of ObamaCare. The rational choice for young, healthy people is not to comply. A study from the American Action Forum concluded that, on average, premiums for men under thirty will increase by 260 percent.22
